Ethereum’s founder has been one of the most prominent figures in the cryptocurrency industry. As decentralized autonomous organizations or DAOs, gain more traction in the blockchain industry. The conversation surrounding blockchain governance becomes more heated. In a Twitter thread, Vitalik Buterin, the founder of Ethereum (ETH), was responsible for creating the conundrum. The problem of giving power to a select group of people versus the freedom to voluntarily delegate decision-making power. His tweet brought to light the issue.
Buterin referenced an age-old proverb in a tweet. The tweet stated that those who seek power for its own sake are unfit to hold positions of leadership. The founder of Ethereum pointed out by using this idiom is applicable to decentralized autonomous organizations (DAOs). In addition, he argued that the presence of transferable governance tokens in DAOs runs counter to the entire concept of DAOs. Buterin made a notable observation. People who seek power would benefit from the possibility of transferring the governance.
While some people were focusing on the mechanisms of governance, others were pointing to the use of blockchain-based technologies. Such as selecting important positions in a DAO using verifiable randomness. Another member of the community proposed selecting token holders at random. Also, rotating between them whenever one of the holders is selected does not show any on-chain activity.
Although Ethereum’s founder makes an interesting point, some people have responded with opposing viewpoints.
A user named Muki on Twitter pointed out in a response that it is unavoidable to delegate decision-making authority. A member of the community stated that it is unrealistic to expect everyone to participate. Furthermore, it is preferable to voluntarily delegate decision-making power rather than to make decisions without adequate information; or not participate, at all.
Willyogo, a user on Twitter, contributed to the conversation. He wrote the idea of transferable governance tokens does not equate to the desire to exert authority over other people. On the other hand, the community member mentioned the undoubted room for development. This is in regard to the voting mechanisms of DAOs.
Twitter user Vagobond weighed in as well. The user suggests having delegates who can be fully recalled is a step in the right direction for moving forward. According to this theory, the delegates who were selected could immediately lose their authority the moment they cease representing the people who had delegated votes to them.
At the most recent Ethereum Community Conference, which took place in Paris, Web3 advisor Hilary Kivitz spoke about DAOs. Also, he also talked about the ways in which they can defend themselves against hostile takeovers. Kivitz believes in the plethora of solutions to the problem, such as inserting poison pills into smart contracts in order to dilute the votes of exploiters.
During this time, Alex Tapscott mentioned in a recent interview the developments regarding DAOs. These are something investors should keep an eye out for while the market is in a bear market. Tapscott emphasized that decentralized autonomous organizations (DAOs) have the potential to replace traditional organizations in the process of resource organization.